Russia’s crude has shifted from discounted sales to trading above global benchmarks as supply shocks tighten the market. Disruptions in the Strait of Hormuz, combined with limited US sanctions relief, have redirected demand toward Russian barrels and boosted revenues.
The change marks a sharp reversal after Western sanctions had forced Moscow to sell at steep discounts. Russian Urals, once priced about $12 below benchmark crude, is now trading at a premium of roughly $4.
Officials including Alexander Novak acknowledged stronger demand, while Vladimir Putin cautioned against relying too heavily on the windfall.
The turning point came with the Iran conflict, which drained global supply buffers and disrupted key shipping routes. As a result, Russia’s oil export revenues have surged, reportedly doubling from about $135 million per day in January to $270 million.
With oil and gas making up a significant share of Russia’s budget, higher prices are directly strengthening its financial position as the war in Ukraine continues.
Before the conflict, markets expected a surplus, but that cushion has largely disappeared. Production disruptions and infrastructure damage have tightened supply, pushing prices higher and increasing volatility.
Despite strategic reserve releases, global oil markets remain fragile, with limited capacity to absorb further shocks.